Economic development leaders still talking growth

1of 6A section of the Grand Parkway just west of SH249 is shown on Friday, Jan. 29, 2016, in Houston. The new sections of State Highway 99, connecting the Cypress, Tomball and The Woodlands areas, are scheduled to open February, 8. Tolls will start being collected beginning February 15. ( Brett Coomer / Houston Chronicle )Photo: Brett Coomer, Staff

2of 6A section of the Grand Parkway just west of SH249 is shown on Friday, Jan. 29, 2016, in Houston. The new sections of State Highway 99, connecting the Cypress, Tomball and The Woodlands areas, are scheduled to open February, 8. Tolls will start being collected beginning February 15. ( Brett Coomer / Houston Chronicle )Photo: Brett Coomer, Staff

4of 6SkyHouse River Oaks maintenance supervisor Manuel Ochoa closes the balcony door to a one bedroom apartment in the new apartment building in the Galleria area Tuesday, Oct. 27, 2015, in Houston. Residential housing now surpasses retail in terms of how land is distributed in the neighborhood. (Michael Ciaglo / Houston Chronicle)Photo: Michael Ciaglo, Staff

5of 6Construction crews work on the Astoria condominium building, left, in the Galleria area Tuesday, Oct. 27, 2015, in Houston. Residential housing now surpasses retail space in terms of how land is distributed in the neighborhood. (Michael Ciaglo / Houston Chronicle)Photo: Michael Ciaglo, Staff

6of 6The Houston skyline as seen while canoeing down the Buffalo Bayou at Buffalo Bayou Park with Bayou City Adventures on a tour which originates at Lost Lake on Wednesday, Nov. 4, 2015, in Houston. ( Elizabeth Conley / Houston Chronicle )Photo: Elizabeth Conley, Staff

Pearland, the former farming town on the southern edge of Houston, has grown rapidly over the last several decades with new retail, roads, houses and subdivisions.

With thousands more people arriving each year, civic boosters like Matt Buchanan hope to boost office and commercial development as well.

"Our main focus is the quality of growth and diversity of that growth, not just rooftops and retail," Buchanan, president of the Pearland Economic Development Corp., told a group of commercial real estate professionals Tuesday. "We want people to know there are places to work, too."

He said the connections to major roads have spurred Pearland's growth, and that will continue with the completion of the Grand Parkway.

Buchanan cited the convenience store giant Buc-ee's, which announced last year that it would build a partial headquarters in Pearland, as the type of business he'd like to see more of in coming years.

Other commercial projects announced last year for Pearland include Mitsubushi's first North American facility at the corner of Texas 288 and Beltway 8, a manufacturing facility for Lonza Houston and a headquarters relocation for Tool-Flo Manufacturing.

"We are trying to grow by 5,000 people a year in Pearland. That is a daunting task, but a great opportunity for us," he said. "We definitely want to be in a place growing and growing. That's what Houston is. It's a big challenge."

Tuesday's event, hosted by CoreNet and the Houston chapter of the International Facilities Management Association, also drew economic development leaders from downtown, Uptown and the Katy area. Despite oil prices tumbling, all the leaders acknowledged they're still working to prepare for Houston's growth.

Bob Eury, president of Central Houston and director of the Downtown Management District, said the historically office-oriented downtown market is now seeing residential growth. Thanks to the Downtown Living Initiative, which offered incentives to developers of residential projects, there are 3,600 units under construction or just coming to the market downtown. Hotel construction has also exploded, with a 50 percent increase in rooms coming to the market.

Eury said with the Super Bowl coming to Houston early next year and the NCAA Final Four this spring, outsiders will get a new perspective on the city.

"This gives us the opportunity to let our city shine," Eury said. "People who haven't been to Houston in a while will experience a different city."

Lance LaCour, president and CEO of the Katy Economic Development Council, said that area has been feeling the effects of the oil price slowdown. The office market vacancy rate is about 20 percent, he said. At the same time, developers brought several speculative office projects to the market that are seeking tenants.

"Our market has focused on office, and office is the softest market we have now," LaCour said. "In terms of trends, we want to continue to be an office market. We have a white-collar labor market, and we want to continue to push that."

LaCour said he felt optimistic because of the Grand Parkway and new housing developments. He said transportation continues to be his area's biggest challenge.

John Breeding, president of Uptown Houston, the tax increment reinvestment zone anchored by the Galleria, said more people are choosing to live in his neighborhood than before. It's a mix of office, retail and residential, but residential has surpassed office.

Breeding likened the economy in Houston today with the recession in 2008.

"The question then was how deep the trough will be and how wide," he said. "I think we find ourselves back there again today."

He noted that land is still being purchased for development, despite the low oil prices. He also predicted more density in building throughout the central city in coming years.

"You would think with oil prices in the $30 range, someone would have stopped," Breeding said. "Some development has, rightfully so, slowed down. But we have seen some of the most expensive land transactions when oil was at $50. That speaks to the confidence of the Houston developers who know the market."

The key going forward will be for Houston to invest in more projects like Memorial Park improvements and ongoing efforts to connect the bayous, he said.

"Investment in the quality of life will drive the center city for the next 50 years," Breeding said.

Erin Mulvaney covers real estate for the Houston Chronicle's business desk. She writes breaking news and trend stories about development, growth and neighborhoods. She also covers business travel and airports. She joined the Chronicle in 2012 as a breaking news reporter, covering shootings, explosions, trials and scandals. A Beaumont native, she has a degree in journalism from the University of Texas. She previously worked in Austin and wrote about politics and policy for several publications.